tax free, the next 5 years

8/4/2019 Tax Free, The Next 5 Years

1/21The next 5 years are the most important of your life, regardless of your age.

The next 5 years are themost important of your life,regardless of your age.

The best way to save for retirement no one has ever told you about.

Just say NO to an IRA, 401(k), 403(b), 457, SEP or ROTH!


2/21

The next 5 years are the most important of your life, regardless of your age.

New knowledge isthe most valuable

commodity we have onearth. The more truthwe have to work with,

the richer we become.- Kurt Vonnegut

Did you know there is an

IRS Approved Retirement

Savings Plan that allows

You to Access and

Bequeath Your Savings

Tax Free. (Not a Roth)

With the Largest Generationin the history of this Country

beginning to Retire and many

who believe Taxes need toIncrease Dramatically, there isno better time than Today to

learn about this Private Planbecause

#1 CURRENT RETIREMENT SAVINGSPLANS ARE A FAILURE!!

The oldest Boomer was born in 1946 and is 62 years old(2008)

The Average Retirement Age (Prior Generation ) is 62

The youngest boomer was born in 1964and is age 44 (2007)

78 Million Boomers make up 29% of the U.S. population

The oldest Boomers will be eligible to start collecting areduced social security benet January 1 st 2008 NOW!! MostBoomers are in trouble in planning for retirement today. Mosthave almost no savings whatsoever.

Those of you in your 50s and especially 40s and 30s needto see what has happened with their retirement planning andmake a conscious decision and VOW to not allow this tohappen to you.

What will happen to you in retirement if youhavent prepared well can only be explainedand described to a point. After that it must beexperienced to fully comprehend it.

According to the Employee Benet Research Institute and theirannual survey:

#2 Wealth Fades quickly for ManyRetirees*

* National Underwriter, February 25, 2005

Looking back after 10 years / current ages 61-71:

BUT During those 10 years:

hospitalized.

If you dont know where you are going,any road will take you there.


3/21


#3 Boomer EchoIf you are in your 20s and 30s, unless changes are made,when you reach age 60 in 2040 benets for all retirees could becut by 26 percent and could continue to be reduced every year thereafter. Social Security Trustee 2006 OASDI Report

MenFor the rst time since 1925, the income of Menin their 30s (adjusted for ination) is

On average income down 12%

#4 Family IncomeFamily Income from 1820 to 1972

yet ination has

not slowed down .

per generation yet ination has not slowed down.

Life and Health Insurance News

Americans are some of the worst savers in

the industrialized world. Statistics from theinternational monetary fund in 2005 show that

income; the Italians, Germans and Canadians

comparison, the actual saving rate in America

The Last time Americans had a negative

Savings rate for an entire year was in 1933, a

time we called THE GREAT DEPRESSION!

In an article by Tom Pugh of the Mercury News, a study by theConsumer foundation of America and Primerica found thatOne quarter of Americans believe their best chance to buildwealth for retirement is by playing the lottery. Not by patiently

saving and investing.

Forbes December 2004

Do you really want your liquid assets in

Over time most families could end up with nearly all of their nancial assets in tax-deferred accounts. All that deferral works wonders if you or your heirs withdraw the money decades hence at the same of a lower ratethan you would have originally paid. This is no longeraxiomatic.

Federal taxes on salary and other ordinary income

are comparatively low now . The top marginal rate is just 35%; considering the current budget decits and thecoming bulge of retirees who will run up Medicare and Social Security costs, it seems likely taxes will clim b.every penny you eventually take from the pre-tax 401(k)or other deductible plan is taxed at the much higher ordinary income rate. All this when you have lost mostof your signicant deductions.

Three years ago Boston University EconomicsProfessors did some controversial calculations showingthat couples earning 50,000 stood to RAISE THEIRLIFETIME TAX BURDEN by contributing to 401(k)s and other qualied plans in part because of the way Social Security is Taxed:

Even people with $100,000 in income might do better saving outside a 401(k).

It sounds like Heresy to workers who have beenunremittingly lectured for the past two decades to save

more in their IRAs and 401(k)s.

But the truth is... there is such a thingas too much tax deferral. Deferred taxes

simply means increased taxes.!!!!


4/21


#6 Taxes

The power to tax

involves the powerto destroy.

Chief Supreme Court Justice John Marshall in 1819

The taxpayer thats someone who works forthe federal government, but doesnt have to

take the civil service examination.

Ronald Reagan

it is an increase of 32%!

in 20 years you will have $520,926 PRE-TAX :

(MTR Includes 9% state tax)

By deferring taxes your retirement income could go down 23%! OR putanother way, does it make sense to

you to work 1 additional year just to pay for the extra taxes - only because you Deferred when you paid them?!

ALSO.

Total Deferred Tax: $177,115 $218,789

Increase in Taxes: +$41,674

= 1 Years NET Income Today!

Net Savings $343,811 $302,137

Monthly Income @ 4% = $1,146 $1,007

After Tax Income = $756 $584

(-23%)

34% MTR 42% MTR


5/21


Those who dont remember history aredoomed to repeat it...

There are two words from the recent past that should putabsolute stark terror into all of you and another reason why youneed to rethink the monies you may have been putting into a

qualied savings plan regardless of your tax level:

#7 Excise Tax Actually three words; EXCISE TAX and CONGRESS. Theyhave the power to change the tax rules whenever they want,and they do. After the National debt reached a record postWWII in 1980, under Reagan the budget was bleeding red inkand the debt balance was increasing dramatically. So in 1986under the tax reform act of the same year, congress initiated

in your retirement savings. Congress did this simply becausethey needed the money, not because it was the right thing todo, saying retirement savings were not intended to createwealth. This became known as the success tax. Or as I liketo call it, the full of it TAX.

After it had been in existence for ten years, this is howPhysician News in 1997 described the effect of this harmfultariff:

Multiple tax laws have had a devastating effect by levying more and more taxes on the retirement dollars.In 1974, heirs would have received almost $1,000,000 of $1,500,000 saved. By 1981, their share would have been

reduced to about $750,000, and today they could receive as little as $375,000, or 25%!

Actually, if you failed to name a beneciary, the remainder after

one famous court case, the heir after all these taxes had beenlevied actually owed more than the inheritance a total of

person, his father, who left him his not worthless legacy andfortune. The court generously ruled a person could not owemore than the account balance, LIMITING the maximum tax to 100%!!!

Will Rogers

The major difference between death andtaxes is that death doesnt change every time

Congress meets.

THE ONLY WAY to protect yourself is to have TAX FREE savings!

Dont be a victim of deferred

tax TRAPS!! And what TIMEmagazine calls

RETIREMENTRIPOFF!


6/21


Retirement survey 2005

A majority of retirees said their BIGGEST MISTAKE

in planning for life after work was

FAILING TO INVEST INTAX FREE ACCOUNTS.

Qualied Savings:403(b), 457, 401(k), SEP, IRA, KEOGH

are NOT tax free.

An IRS approved Private

Retirement PlanIS TAX FREE!

Do I have yourattention?

It aint what you dontknow that gets youin trouble.

Its what you know forsure that just aint so.

- Mark Twain

What most people think is the best way to save

just isnt. Over 25 years ago the IRS and Congress

approved a retirement savings plan known as

a Non Qualied Private Retirement planning

Alternative.

Which list of options would you choose to be part of your retirement plan?

IRS Approved Approved

Contributions Tax Deferred Taxed

Earnings Tax Deferred Tax Deferred

Principal Withdrawals Taxed 33-43%+ Tax Free

Earning Withdrawals Taxed 33-43%+ Tax Free

Retirement Income Taxed 33-43%+ Tax Free

Beneficiary Value Taxed 33-43%+ Tax Free

Contribution Limit $15,500 NO Limit

Pre age 59.5 Penalty 10%+State penalty None

Mandatory Distribution age 70.5 None

Loans (if allowed*) $50,000 max NO Limit

Loan Repayment mandatory optional

Historical Rate of Return 3-5% actual 7-9%

IRA/403(b)* / 401(k)*457* / Roth / SEP

PrivatePlan

Fund Completion Guaranty no YESfor Surviving Spouse

Maximize Pension Option no YES

Able to be Own Bank no YES

Includes Long Term Care no Optional

Use for College Funding no YES

Avoid Social Security Taxes no Maybe

Age 45: Save $1,000 month for 15 years @7% net fees:

Retirement Income Age 61 $40,000/yr $40,000/yr

Account Value Age 61 $288,000 $317,000

Retirement Income Age 71 0 $40,000

Account Value Age 71 0 $243,000

Retirement Income Age 100 0 $40,000

Account Value age 100 0 $6,000,000

TOTAL TAXES PAID $249,792 $97,727

Account BROKEAfter 10 years!

Net Taxes

30 YearsMORE

Income!and

$6,000,000


7/21


If another way is more Tax SMART for YourRetirement Years and by being tax smart gives youmillions of dollars more for retirement, when would

you want to know? Let me ask you a question.

Do you think taxes in the future are goingto be lower same higher

I agree with you. Taxes are certainly going up.So why would you invest in something to defer

the taxes to a future date when you believe taxeswill be higher and you will have lost most of

...Lets explore this a little further.

The National DebtThe National Debt has increased from 5.728 trillion on Jan 20th,2001, to 8.713 trillion (April 2007), and has continued to increase

an average of $1.71 BILLION per day! Since September 29, 2006.The estimated population of the United States is 301,653,479 soeach citizens share of this debt is $29,344.06. The current wars

in Afghanistan and Iraq are adding to this debt at about 10.625 million per HOUR! - $1.8 Billion a week. (This does not includethe medical, rehabilitation, disability and other costs for tens of thousands of soldiers over the rest of their lives which is expected to add billions, if not Trillions of dollars to the actual total cost in thedecades ahead. [www.msnbc.msn.com/id/15377059]

payments to the holders of the National Debt the third largestitem in the budget after Defense and Human Health Services.

At the end of scal 2001, the NationalDebt was 57.4 percent of gross domestic product having droppedfrom 67.3 percent at the end of scal 1996. At the end of the

current scal year, the National Debt is projected to be 65.5percent of GDP. What will happen in the future is anyones guess.

The largest generation population ever in the history of thiscountry and mankind is about to begin! Also the numbers of workers per retiree is at a historical low and continually gettinglower. How this is going to affect income and other taxes andsocial security benets is yet to be known, but this is what we doknow:

The numbers of workers per retiree: 1960 5 workers

2050 2 workers

President George W. Bush / State of the Union 1-28-08

Every member in congress knows that spending onentitlement programs like Social Security, Medicare

and Medicaid is growing faster than we can afford. Weall know the painful choices ahead if America stays onthis path: massive tax increases , sudden and drastic

cuts in benets, and crippling decits.

March 20, 2008 NP Radio

For the rst time in the history of this country, wehave gone to war on credit by not raising taxestoo. Instead we lowered taxes! Some say it has cost2-3 trillion we have mortgaged part of our future toChina

Ted Coppell

The United States National Debt as a Percentage of GDP

0%

20%

40%

60%

80%

100%

120%

140%

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

YEAR LOWEST HIGHEST %ofGDP

1913(1st Year) 1% 7% 9%

1918 (WWI) 6% 77% 37%

1920s 1% 25% 17%

1936 (Depression) 4% 79% 40%

1945 (end WWII) 23% 94% 120%

1954 20% 87% 625

1981 13.8% 50% 37%

1986 11% 28% 47%

1190 15% 31% 55%

1993 15% 31% 55%

2001-07* 10% 33% 66%*

2010 ?% ?% 75%+

Marginal Tax Rates and the National Debt

Estimate 50 Year High!


8/21


Social SecurityStatement of Douglas Holtz-eakin, Director Altrernative

Perspectives on Social Security before the committee onFinance United States Senate, FEB. 2, 2005:

After 2020, Social Securitys..outlays for benets are projected to exceed revenues. To pay full benets, the system will eventually have to redeem the government bonds held in its trust funds. But where will the Treasury nd the money to pay for those Bonds? Will policymakerscut back other spending in the budget? Will they borrow

more? OR WILL THEY RAISE TAXES?

You cannot escape theresponsibility of tomorrow

by evading it today? Abraham Lincoln

Something Scary...

A USA Today article states that by 2032 the entire social

security fund will become insolvent. Many people arebafed by this insolvency. They mistakenly think theirpayroll taxes deducted for Social Security go into apersonal account at the Social Security Administrationwhich will be paid to them as soon as they retire. This isnot so. The USA Today article For Boomers, SocialSecurity IS Near Bust explains: What payroll taxes arenot spent on benets are used to buy Treasury bonds.That means the Social Security surplus is being loanedto the federal government to cover its other expenses.In other words, your FICA taxes are not being set asidefor you but are being spent in other areas of govern-ment where policies on spending are scally sound. That

means with the inux of Baby Boomers making hugedraws on the system, if you will be 65 in the year 2032,you may not be able to count on Social Security at all.What will you do to make up for those funds? If you,like many other misinformed Americans, are mistakenlyfalling back on Social Security as your primary source of retirement income, perhaps its time to rethink things. Notperhaps.IT IS TIME!!!

According to the Commissioner of Social Security, Ken-neth S. Apfel, Social Security can help support your

family in the event of your death and pay you benets if you become severely disabled. But it was never intendedto be your only source of income when you retire orbecome disabled, or your familys income when youdie. Social Security Supplements the income you havethrough pension plans savings and investments.

That means if something drastic doesnt happen soon

years will have bodies that are ready to retire but in-comes that are not. IF taxes are raised again to solvethis problem, why in the world would you want to defertaxes to simply pay more? IF taxes do not go up, whywould we defer taxes to a time when we have lost allof our signicant tax deductions and now there is adrain on our society that has never been experienced in

America. Something like the perfect storm.

This was written BEFORE the Pharmacy Bill costswere added to the future costs of Medicare, or thewars in Afghanistan and Iraq:

Medicare Costs Rising

Senior Health Magazine:

Medicares growth in spending is outpacing its growth in revenue. Most of the revenue in Medicare is derived from payroll taxes THAT HAVE NOT INCREASED FROM THEIR

PRESENT RATE OF 2.9% SINCE 1986. There is no plan to increase the Medicare payroll tax rate in the near future.

With an ever aging baby boom generation joining theMedicare roles, the number of beneciaries will grow by 77% over the next 25 years, from the present 40 millionto an estimated 70 million. As soon as 2010 the number of new medicare beneciaries will grow faster than the

number of new workers contributing to the program.Medicare spending is expected to double in the next 25

years. THE MEDICARE TRUST FUND WILL RUN OUT OF MONEY AT THAT RATE BY THE YEAR 2025!


9/21


December 15, 2003

The Cost Of Medicare Pharmacy BillDouglas Holtz-Eakin: Director of the Congressional

Budget Ofce and prior chief economist for the

Presidents Council of Economic Advisors.

If one takes into account the rise in prescription drugcosts at historic rates and the increased number of

beneciaries, its easy to see this bill cost over $1Trillion in the second ten years and perhaps approach$2 Trillion in 10 year costs between 2014 and 2023. In

rough orders of magnitude, that would suggest the bill is at about $190 Billion in 2023.But if we have constant growth in prescription drug prices, something rising at 3 percentage points per year, then in 2023 this bill would cost in the neighborhood of $360 Billion and i t would be

on rack to be about 4 % of GDP by 2050.

NO END TO USs war Budget WoesOctober 30, 2007 LA Times

WASHINGTON According to CBOs estimates the majority604 Billion appropriated to date

has been provided to the pentagon for US military operationsand other defense activities. The Department of Defense (DOD)currently is obligating an average of almostmonth for expenses associated with its operations in Iraq and

Afghanistan for other activities related to the war on terrorism.

spent by the VA for war-related benets. Nor does it reect theadministrations most recent request.On October 22nd for an

funds, the CRS estimates that total war costs will reach about

Nobel Prize Winning Economist Joseph Stiglitz

28 February 2008: In 2003 total costs were estimated by the

in debt interest, future war costs, continued presence in Iraqand Afghanistan, equipment replacement, lifetime healthcareand counseling for veterans the total costs are estimated to

be

lets keep going...

December 18, 2007

The Financial report of the U.S. Government for 2006 wasreleased today by the U.S. Treasury Dept. and the PresidentsOfce of Management and Budget (OMB). It reported thegovernment

and

MORE!!!!!

Ofcials warned that something must be done to addressthe signicant shortfall in these benets. This decit has not

When added to other government commitments, the totalshortfall as of Sept 30, 2007 represented , up over

Our Government has made a whole lotof promises in the long-term that it cannotpossibly keep, said Comptroller General DavidWalker, head auditor of the Congressionalnonpartisan Government Accountability Ofce.

Walker said Government nances are insuch disarray he was unable to sign off onthe books largely because of very seriousinternal control weaknesses.if the federalGovernment we a private corporation ourstock would be dropping and there would betalk about whether the companys managementand directors needed a major shake-up. Thistranslates into a de facto mortgage of about

theres no house to back up this mortgage.

(White House) OMB Director Jim Nussle said, Reducingthe decit in the short-term will put us in a better position fordealing with the longer-term entitlement issue, which canonly be characterized as AN UPCOMING FISCAL TRAIN

GAO director Walker: Our Government has made a whole lotof promises that, in the long run, it cannot possibly keep -

WITHOUT HUGE TAX INCREASES


10/21


Alan GreenspanChairman of the Board of Governors of the Federal Reserve of

the United States 1987 2006 (an unprecedented 5 terms).

During his tenure considered to be the leading authority on American domestic economic and monetary policy. His active

international inuence continues to this day.

Awarded the:

Presidential Medal of Freedom(By President George W. Bush in November 2005.

The highest civilian award in the United States)

Knight Commander of the British Empire

Commander of the Legion dhonneur

Forbes Magazine in September 2007 asked AlanGreenspan:

What should we be worried about most right

His Answer

Strangely enough, I think its politics.We have a dysfunctional political

system in the sense that there are very serious scal problems out there, most importantly Medicare.

As best I can judge, when the Baby Boom (generation) retires, WE AREGOING TO HAVE TO EITHER RAISETAXES VERY SHARPLY OR CUT BENEFITS IN HALF . No politician wantsto confront this. And this is a very sad event BECAUSE WHATS AT STAKEHERE IS THE FISCAL STABILITY OF THE AMERICAN GOVERNMENT.

And in addition to this...

(and the world) will begin in 2008 (eligible for SocialSecurity). The number of workers per recipient to support

Medicare costs for this generation (along with Social Security)will become the largest expenditure in the U.S. budget in thenear future, and both are expected to be broke around 2020.Just 12 years from now.

has been since the end of WWII

decades.

January 24, 2008

(Opposed by (his) republican party and Governor Bush in running for (re)

election in 1996 because of his anti-spending record. Served on the Joint

Economic Committee and the Committee on Financial Services (Ranking

Member of the Domestic and International Monetary Policy, Trade and

Technology subcommittee.)

(the U.S.) are on the verge

Do you think taxes just

might (have) to go UP

(more) in the future?!

And that it might be better to pay them NOW ?


11/21


If you were a farmer would you rather pay taxeson your seed in the springtime or wait until thefall and pay tax on your harvest. I take the tax

on the seed every single time.

Guess what there is no need towonder any longer.

Oh, didnt you hear.

This is NOT just a possibility

TAXES REALLY ARE GOING UP!

Get your money while you still have a chance.

Are you aware that in May 2007 Congress passed the

Both houses of congress voted to allow the Bush tax cuts toexpire in 2010.AGAIN!! They just havent told you yet.

Chicago Sun TimesRobert D. Novak

May 21, 2007

A tax hike that is not a tax hike.

In routine party-line votes last week, bothhouses of Congress completed action on aDemocratic crafted budget containing THE

BIGGEST TAX INCREASE IN U.S. HISTORY!!

Under the Democratic Budget, the BUSHadministrations tax cuts are permitted to expire

at the end of 2010. That means higher taxes if Congress does nothing.

And what about Qualied Plan Savings...

Because of:

1. Failure to invest in stocks

2. Failure to invest intelligently3. Poor Returns

4. Taxes

#1) Failure to Invest in Stocks A private Retirement plan does not have to be invested in

stocks or mutual funds, although a large percentage (almostall) of your plan needs to be! Because historically, for moniesto be left idle for at least 5 years, the biggest risk is by takingno risk and by NOT being in the market over long periods of time. On the other hand the major reason retirement plans failis because of too much risk. Therefore if youre smart you wantyour private plan to be designed with NO RISK, yet benet fromthe average market return. Ibbotson Associates published achart that shows the annual rates of return from 1925 to 2000for various investments and ination.

Inflation 3.1% $10 $9.71 3.1%

Treasury Bills 3.8% 17 5.07 2.2%

Long-term Bonds 5.3% 49 17.00 3.8%

Municipal Bonds - - 22.00 4.2%

Large Company Stocks 11.0% 2,587 459.00 8.5%

Small Company Stocks 12.4% 6,402 1,136.00 9.8

GrossReturn

Pre-tax:$1 in 1925in 2000

Post-tax:$1 aftertaxes

NetReturn


12/21


We Need the Reward Without The Risk

For the greatest long term returns, savings should be investedin stocks. But because of their fear of losses, people invest only

but for the wrong reason, but because the higher long term

return in the market, most earn dismal returns. In a 2006 reportreleased by Morningstar and the Harvard Business School (theBCT Study), it examined the performance of 4,000 mutual fundsbetween 1996 and 2002 (which includes all the boom yearsand the crash of 2001), they found the return net of all fees earned by the average investor working with a nancial advisorwas a whopping.

We all know the market goes up and the market goes down. Alas, most of the time it is the investor who is taken for aride. In its 2001 study, Dalbar Inc. released a study entitledQuantitative Analysis of Investor behavior, and for the 17 yearperiod to Dec. 2000 concluded that:

marketindex returns

16.29% per year.

Forbes 1/2007:

You should pay as much attention tocosts as you do to past performance.

management and other fees, or taxes):

2007 99.932006 96.52

2005 84.95

2004 82.48

2003 75.67

2002 59.89

2001 78.14

2000 89.86

1999 100.00

Pretty bleak. Your principal is worth only about 90 cents and

NO gains for 8 years! Pretty bleak. But because of ination and

Longevity Risk you cannot afford to not invest in stocks long

term for retirement so what do you do?

This is the MIRACLE of a Private Plan , because it allows

you to be invested to earn stock market type returns more

safely. Your contributions and annual gains CANNOT GO

Because of this the gross crediting to one top PP at the end of

It would also of meant 8 more years of

peace of mind !

But dont forget the FEES not included in this

It has taken 8

again! But the

the start of 2008.


13/21


Market watch February 2008 The average return for a domestic

One major reason why investors fare so poorly are mutual fundfees for sales costs and annual administrative fees. These can

fees

This is what the Senate Committee on Governmental AffairsHearing on Mutual Funds; Trading Practices and Abuses thatHarm Investors stated in November 2003:

In most industries there are economies of scale. Onewould think that as mutual fund assets increase, advisory fees would decrease. But in fact the reverse is true. It

appears that as mutual funds assets rise, advisory fees rise even more. As Mr. Bogle and Mr. Spitzer will point out, between 1980 and 2000, mutual fund assets grew by 60 times, but the funds fees and expenses grew by 90 times.

The combination of opaque fees, abusive trading practices and governmental policies which channel investor money into mutual funds has transformed this once sleepy industry into a monster. The mutualfund industry is now the worlds largest skimmingoperation a $7 Trillion trough from which the fund

managers, brokers and other insiders are steadily siphoning off an excessive slice of the nations household,college and retirement savings.

If your savings are qualied (IRA, etc..) lets not forget taxes.They are not paid on current earnings, but when you withdrawthe savings. It is not at the long term capital gains tax rate of

will have lost most of your signicant tax deductions. It doesntmake any sense at all.

But I dont want to go among mad people, Alice remarked. Oh, you cant help that, said the Cat. were all mad

here. Im mad. Youre mad.

Lewis Carroll / Alice in Wonderland.

LESS load/purchase fees, management fees, trading fees andredemption fees. Also for many of you who are to nervous toride the stock roller coaster you will have timing costs which

always means a lower return. On what is left over you havethe privilege of paying these taxes! If you weather all those

costs because you thing you have a great fund to ride untilretirement, well, more madness is

Maybe even more remarkable is another study based on

December 31, 2006 values, that looked at the continuedsuccess of previous funds that were at the top of their category.

This is the percentage of funds who maintained a ranking

over the consecutive 12 month periods.

In the Book, Stocks for the Long Run, Professor Jeremy Siegel

reports that in the past 20 years, there were only three years as

Dont try to buy at the bottom and sell at the top.

It cant be done, except by liars.Bernard Baruch


14/21


If you do weather all these obstacles and actually earn anaverage return, then the biggest problem when it is time toactually withdraw retirement income from savings, is taking itout at to large a rate. Most experts recommend.

ONLY 4% for INCOMEIf you want whatever amount you have saved to last throughouta 30 year retirement life, the Schwab Center for InvestmentResearch (among others), recommends a 4 percent solution for conservative moderate investors who want a very highlevel of condence of maintaining their standard of livingfor a retirement lasting 30 years. That means withdrawing(only) 4 percent of the portfolio value in the rst year, thenincreasing the amount each year to keep up with ination.

Other factors that need to be considered include whether you

want to spend more the rst few years while you are younger;deferred Social Security, any other (future) sources of incomeyou may have (inheritance or from sale of other investmentassets); your tax situation of course; and how much , if anything, you want to leave to your heirs or charity. It was alsoreported in the .

Journal of Financial Planning (2004)

Assuming a minimum requirement of 30 years of portfoliolongevity, a rst year withdrawal of 4 percent followed

by ination-adjusted withdrawals in subsequent years, should be safe. In no past case has it caused a portfolio to be exhausted before 33 years, and in most cases it will lead to portfolio lives of 50 years or longer.By comparison, a 4.25% rst year withdrawal couldexhaust a portfolio in as little as 28 years , were past conditions to repeat themselves.

unheard of. To weather these ups and downs and make certainyou will not outlive your money, all the 100s of computersimulations that have been run on past historical data tells us

not outliving your money!

Outliving Your MoneyTrinity University in Texas also did a study using a mix of

, looking back from 1926 to 1995. Withan initial withdrawal rate of 4% there was a :

Here is a study that was done to determine how long savingswould of lasted between 1926 and 2005, based on all 20, 25and 30 year rolling periods during those years. It reects a mixof the share of savings kept in stocks / bonds.

If youare invested in bonds and CDs there is a 74%* chance youwill be at broke!

Just as important as how

much you make,is how much you keep.

- Anonymous.

100/0 80/20 60/40 40/60 20/80 0/100

3% 100% 100% 100% 100% 100% 100%

4% 98 100 100 100 95 75

5% 79* 82 82 75 53 26^

6% 67 67 61 44 23 14

7% 56 53 40 26 9 0

Likelihood Savings Will Last 25 Years

Withdrawal

Rate

stocks/bonds


15/21


Why this result? Because of the dramatic uctuations in thevalue of stocks at any moment in time. If you need to tap yourstock funds for retirement income, pay for college, health careor convalescent care, then you cannot wait for your savingsto recover. If this occurs at the start of your retirement, thisimpacts the return on your stocks and you income for the rest

years.

If the market has a loss, it needs to have an even greater return

afterwards just to get back to even. This is the stock marketmath for 2000-2002.

the reduced value just to get back to a zero loss! This isaggravating to say the least. Over the long term, historicallystocks have recouped their losses and the 30 year average

But can you afford to wait to retire if the market again experiences losses in a row

College tuition cannot be put off to wait for the market torecover. Or unforeseen expenses for major health care, orlong term care bills for you or your spouse or parents.These things CANNOT WAIT! Can retirement wait?! This is thedark side of stacks we all fear the closer we get to and in retirement.

The market can stay

irrational longer than you canstay solvent.

John Maynard Keynes

But the Greatest FEAR of Retirees today and in Newest risk the Boomer

Generation Faces is Longevity Risk! Andwhatever you do, don forget ination!

Ination is like a virus inthe economic bloodstream,

sometimes dormant andsometimes active, but leaving

the patient weaker after

every new attack. President Ronald Reagan 1982

INFLATION is the Scourge ofretirement!!!

What is your REAL number? What is the actualdollar amount you need to save each month,

starting this month to properly prepare forretirement while keeping up with ination?

Most have no idea

for you to maintain

Sneaking up on you slowly over time, Inationbecomes the scourge of retirement. If you dont believe me,

just ask you parents and or Grandparents. Or just look downthe street at the price of gas in todays world compared to 18

Years ago.

Life Expectancy.Many of us will live longer in retirement than we worked!

One of the biggest obstacles in retirement Planning is thefailure of people to realize that many of us are going to live a lotlonger than we may think! The life expectancy of a woman freeof cancer at age 50, is 90!

For a couple age 65, if both are free of heart disease and

Running Years: 1 5 10 20 30

61 yr Average 8.95% 8.15% 8.16% 7.50% 7.14%

Highest 45.02% 17.38% 16.04% 13.94% 10.04%

Lowest -29.72% -5.76% -2.11% 2.72% 5.24%


16/21


What all this means is that the fastest growing age group isthose over 100! The U.S. government estimated there maybe over 2 million Boomer centarians! Will your savings and

With advances in medical technology, people are living longer.This longevity is introducing the probablilty that people willoutlive their money. Talk about a scary thought!!! According tothe Article Thirty Years of Retirement by John Pierson:It used to be that people retired at 65 and died by 72, sevenyears of retirement. Not Anymore! Thanks to advances inmedicine, quite a few folks will live to a ripe old age of 85 or 90.Instead of seven years of retirement, many Americans can nowlook forward to 30 years of life after work. Thirty Years! Thesewords can strike terror into the heartor joy. Joy for those whohave planned fun things to do with the last third of their timeon earth and have enough money to pay for them. Terror forthose who havent planned and havent saved. AS it happens,far too many people feel terror, or would feel terror if they only

know how ill prepared they are for 30 years of retirement, Or for20 years. Or even for 10. Because of medical intervention it isprobable you will live longer than your money will last if you donot plan well.

LIfe Expectancy means 1/2 live longer!Living too long is fast becoming the major nancial risk of the 21st century. Combined with the challenges facingSocial Security and the decline of corporate pensions,

this adds up to a perfect storm for retirees who might outlive their retirement nest egg.

Dr. David Babbell, August 2007 Professor of Insurance and Risk management at The Wharton School / university of Pennsylvania

Statistics show that the last 10 years of a persons life arethe most expensive because many times they are spent in anursing home or long-term care facility. More than 60 percentof people age 65 and older will need long-term care beforethey die. Again, John Pierson puts it best in his article Thirtyyears of Retirement : By the time members of the Baby Boomgeneration have reached retirement in about 2020, an average

like that can soon destroy even the best-laid retirement plansand nest eggs.

Can these Stock Return Obstacles

Can you beat the Risks of Ination and

YES!!! Absolutley YES!But only if you are willing to change your

thinking about how you save for retirement!

There are two times when aman shouldnt speculate:

when he cant afford it,and when he can.

Mark Twain

AGE MALE FEMALE

40 to age 77 to age 81 -

45 78 81 -50 78 82 -

55 79 82 -

60 80 83 -

65 81 84 -

70 82 85 99%

75 84 87 97%

80 87 89 89%

85 90 92 72%

90 93 95 45%

95 97 98 18%

100 101 102

Commissioners 2001 Standard Mortality Table

HOW LONG DO YOU NEED YOUR MONEY TO LAST

AT 65, ATLEAST ONEOF COUPLE

LIVES TO:


17/21


A Private Retirement Plan.This is how many people would dene the Ideal RetirementInvestment:

NEVER have to be repaid)

spouse.

You are in luck this is the description of aPrivate Retirement Plan! The short answer is, A PrivateRetirement Plan is a way to have an Index Fund (optional)inside an IRS approved wrapper that allows you to accessand leave to your heirs, your savings

The only catch is our investment wrapper is very limited bythe IRS code as to which wrapper it will allow to do all thesethings. In fact there is ONLY ONE nancial asset that isallowed by the IRS! But because of this.

ZERO IS HERO!!!!The returns of Index linked PPs are usually tied to the

to also offer returns linked to the DOW and InternationalIndexes. The main benet is the because your savings are NOTdirectly in the market, your account value cannot go downbecause of what happens in the market! You keep all of yourannual gains (less only plan fees)! The trade off is you will not

in the way the two work (the actual index vs. and index link)and that your value cannot go down because of market losses,your gains may in fact be MORE than the actual index.

It would be a disservice to attempt to try to explain to you moreabout what a PP is and all the details about how it works in thisshort booklet. But I can tell you it is NOT a stock, mutual fund,annuity, index or variable annuity. Also it is highly regulated,and is offered by the largest, oldest and most and most securenancial companies in the world with impeccable ratings.

So how do you get stock market returnswithout stock market risks?

The simple case for index funds is part theory, part practice, and part arithmetic. Practice conrms the theory.Returns earned by the average equity mutual fund havetypically fallen short of the returns on appropriate stock

market indexes by an amount approximately equal to theoperating expenses and transaction costs incurred by thefunds.

Over the past 25 years, the average fund has earned annualreturns averaging 11.6% compared to a return of 13.1% for the Standard and Poors 500 stock index, a shortfall of 1.5

percentage points per year. In fact, only 32% of actively managed equity funds have outpaced this unmanagedindex, and no one has ever suggested a methodology by which those few winners could have been selected inadvance.

And simple arithmetic makes it clear that this difference iscritically important. Over 25 years, a $10,000 investment inthe Index would have risen in value to $217,100, comparedto $155,000 in the average fund. This shortfall - $61,600 isclearly enormous. That sums up the case for Index funds.

John C. Bogle, Founder and Former ChairmanThe Vanguard Group

Most of the Mutual Fund investments I have are

- Charles Schwab

nd the best way to own common stocks is throughan index fund. Those following this path are sureto beat the net results (after fees and expenses)

professionals.- Warren Buffet, Berkshire Hathaway, Inc.

1996 Shareholder Letter

Most investors would be better off in an index fund.- Peter Lynch, Famous stock picker

Most of my investments are in equity index funds.

- William F Sharpe, Nobel Laurete in Economics, 1990

- Daniel Kahneman, Nobel Laureate in Economics, 2002


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There is little statistical evidence of mutual fund managers outperforming the market over the long term.In any given year, 50% of them will (and 50% will under

perform) excellent past performance is often the result

of something other than skill namely , chance Almost every economist I have ever met does the same thingwith his money: PUTS IT IN INDEX FUNDS . What arethe odds that you are better at picking winning

mutual funds than they are?

This table displays how a private plan invested in an indexfund could perform with todays illustration rate. This isbased on the average of the past 50 years history of the

returns earned by the plan:

There is likely NO other way you can potentially earnthese kind of NET returns with NO market risk and

be able to access for income and leave the remainder

Having a guarantee that your account value cannot go downbecause of market losses is important and valuable in regard toplanning for your retirement income, because.

In its November 2007 issue Kiplingers magazine, the article,The best tools to maximize your Retirement said:

Theres no up front tax break, but decades of tax-free growth , plus tax-free income in retirement.

That could be the denition of a Private Retirement Plan thatis why it is often referred to as a SUPER ROTH! There arebenets in doing tax-free savings in a ROTH but there are

have! I can get all the benets of a ROTH, without any of thestrings attached. These are the differences:

Contribution after-tax after-tax

Contribute ONLY Earned Income yes NO

Taxes - Accumulation Tax Deferred Tax Deferred

Distribution Tax Free if >5 years Tax Free

Pre 59.5 penalty (CA) 12.5% NO

IRS Penalty Free Restrictions limited YES

Annual Contribution: 50 $6000 yr NO limit

Life Insurance Allowed no YES

Loans allowed no YES - NO $ limit

Loan repayment required n/a NO

Option to be own Bank no YES

Includes Long Term Care no Free Option

Maximize Pension Option no YES

Child College Funding no YES

Subject to Tax Law change yes unlikely

ROTH PP

AND > age 59.5 NA

Age 40 45 50

Year 10 6.61% 6.50% 6.17%

15 7.73 7.63 7.38

20 8.22 8.14 7.94

30 8.66 8.61 8.51

40 8.85 8.82 8.72

50 8.93 8.89 8.8255 8.96 8.92

60 8.97

NET PP Hypothetical ROI *

* Values based upon crediting rates 2/2008.Premium paid through age 100.No withdrawals from the plan.


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IT is also hands down the BEST plan available for ..

COLLEGE SAVINGSTrying to understand the different college savings .grant/loanprograms (529 plans, prepaid tuition plans, Coverdell ESA, andCustodial accounts) is almost impossible because they are socomplex. With some of the plans you get a tax deduction. Withothers you can access money tax-free, if you use the money forcollege expenses. But if you dont, there are severe penaltiesand taxes. Unless congress renews them, most of these taxbenets will expire in 2010 anyway. There are over seventy 529plans, all with different investments, rules and costs, and withmany of the you give up control of your money.

Then there are still the college nancial aid formulas whichhave their own problems for you: Free nancial aid is reduced

parents.

Dont despair! You can eliminated many of these tax problemsby saving instead in a Private Retirement Plan. The moniesgrow tax deferred and you can take them out tax-free. Best of all most college aid formulas exclude these plan assets, andparents retain control over the cash values (not the child its

YOUR money). Bonus, if your child does not go to collegethese monies are now part of YOUR tax-free Private RetirementPlan!

If your child is just a few years away from starting college,the cash value in a PRP may not be ready to pay theseexpenses. Dont despair! Sometimes a PRP needs about10 years to really start rolling. So in the meantime you canobtain student loans and grants as the money in a PRP doesnot affect your ability to get these loans. After graduationuse the plan earnings to pay off the loans and/or to pay forgraduate (medical, law) school. You may be surprised that atyour retirement it will also STILL be able to pay you TAX-FREEincome!

There is one other possible benet too that other plans do NOThave. It includes a death benet. If the worst happens and aninsured parent dies the PRP can guarantee ALL the moniesthat will be needed to see your child or grandchild throughcollege. What greater legacy can you plan for and leave thanthat! All this simply by changing how you save and beingmore efcient with your money. Why every person in Americadoesnt have one of these is a mystery to me.

Another great and unique opportunity not offered by anyother Retirement savings plan is the opportunity to use yoursavings while you are still working to ..

This is a concept I have taught individuals for years now.Need a new car? Or furniture? Or do you want to take a trip toEurope? This one benet of a

Payments are not

ONLY 5 years to fund their PRP. After that they borrow outevery year until age 60, funds to buy a new car. Each timethey borrow they pay themselves back over the next ve yearsthe same payment that before would ordinarily be paid tothe bank. If you do this, you will ALSO create income for yourretirement!

Age 30-34 $600 month - - -

35 $0 $30,000 $597 mo. -

36-39 $0 - 597 -

40 $0 35,000 697 -

41-44 $0 - 697 -

50 $0 45,000 896 -

51-44 $0 - 896 -

55 $0 50,000 996 -

56-59 $0 - 996 -

60 $0 55,000 1,095 -

61-64 $0 - 1,095 -

65-100 $0 - 0 $40,000

PP

Premium

Car

Loan

Car

Payment

Retirement

Income

Tax FreeEvery Year![* will limit future loans]

Age 65 $539,00075 $771,00085 $1,657,000

Cash Value You CANT do this with an IRA or Roth!A 403b has restrictions. ONLY by beingyour Own Banker with a PP can youenjoy these benets!


20/21


So with all these benets.

TRADITIONAL QUALIFIED PLAN

Good Question!

Lets look at the Benet Chart and SEE which one has whatyou want:

QP = Qualied Plan PP = Private Plan

IRS Approved PP and QP

Tax Deferred Accumulation PP and QP

NO limit on Contributions PP

Tax Free Income PP

More Total Net Income Possible PP

Tax Free to Heirs PP

Penalty Free Access under age 59.5 PP

NO Distributions required at 70.5 PP

Guarantee Retirement for Survivor PP

PP and QP

PP

NO Loan repayment required PP

Be Own Banker PP

Future Savings Income Protected PPfrom ALL Tax Increases

Includes Life Insurance PP

[403(b)/457] montly savings: NO PP

Government/School District Forms,

Reporting, Fees or Investment Control

There is no security on earth,there is only opportunity.

General Douglas MacArthur

Your Retirement Well being!Most people will work for about 40 years. Then they are retiredfor 30-40 years! Most people invest directly in the market withthings like mutual funds but unknown to most, their actual

value at all times that could force you to either delay retirement sometimes for years , or worse come out of it. To top it off they save inside an IRA, 403(b)/457, SEP or 401(K) where thetaxes are deferred this combination has proven time and timeagain to be a savings disaster.

Or you can follow the advice of Albert Einstein Stop theinsanity and try a NEW way! By saving in an Index linkedPrivate Retirement Plan where you can enjoy Tax-Free growthand Income, with guarantees your principal and earnings cannever go down in value because of market slumps. With this

including the fees and management costs! You can also leavewhats left over to your heirs tax-free! The list of benets goeson and on.

The information in this booklet is just the tip of the iceberg. Tolearn how you can benet from saving in a Private RetirementPlan, meet with us to design a plan for your specic needs andgoals.

Doing your best at this moment puts you in the best place for

the next moment. Oprah Winfrey


21/21

Last Chance Retirement is the answer to my prayers andthose of millions of my fellow baby boomers with taxable 401(k)and IRA plans. With the current state of the US economy,the inadequacies of Social Security and Medicare, the US isill-prepared for the retirement of more than 77 million babyboomers starting in 2008. Instead of looking forward toretirement, because of the inevitable required tax increases,we now are being faced with retirement by having been setup to pay those taxes from our nest eggs, and most of usdont even know it. Last Chance is our urgent call to actionto salvage our nancial freedom before its too late. This isREQUIRED READING for anybody who wants to truly retire andnot just survive old age. Bill Buettner / Modesto, CA

This is the most practical and readable analysis yet on thesubject of the impending retirement crisis in America. Yourbook takes a very practical and common sense approach todealing with our impending nancial storm and backs it upwith logic and a nice blend of historic and current evidence,not just numbers and charts. I enjoyed it thoroughly and wouldnot hesitate to recommend it to anyone who plans to retirein the next 30 years. Thank you for your valuable insight intothe subject and for shedding light on a potentially disastrousproblem in America. Dave Haslett / Tucson Arizona

I am amazed at the information you have gathered andprovided about Private Retirement Plans that could really helpa lot of people think twice about how they are preparing forretirement. It has a wealth of information to help them make a(smarter) decision. Linda Santos / West Covina, CA

This is by far the most comprehensive book with theanalysis and solution on Private Plans that has been written.With it, those saving for retirement have all the information theyneed to redirect their life savings into safety and income theycant outlive. It is shocking how many people hold on to theold outdated strategies of the 80s and are still touting 401(k)s,403(b)s and IRAs. It is now time to take control of your futurewith these ideas or plan to retire with a part time job. Frank Sullivan / Loma Linda, CA

What a terric book! Finally proof that a Private RetirementPlan is not Too Good to Be True, just Too Good to Miss.My clients will owe a measure of their well-designed retirementplans to you for writing Last Chance Retirement. Earl Brown /

President IFS / Laguna Nigel, CA

Ive read a lot of books that address the retirement needsof Boomers and this may be the best explanation of a PrivatePlan I have ever read. I like the way you educate people on ourcurrent economic situation and offer a solution that should bemade available to all Americans. The part where you show howa Private Plan can actually earn more than the index actuallyblows me away! Ron Petronovich / CEO, FEG

(not including home equity.)

One third of workers postpone retirement and anotherthird return to work after 1 years because they have notsaved enough.

INCOME! In 2005 he average retirement income benet

Workers age 55-64, on average, retirement savings in401(k)s and IRAs will provide an annual income of only

replacing about 9% of income!

over and over and expectingdifferent results.

Albert Einstein

It is time to try another way!

tax free, the next 5 years

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